Sheffield Company purchased a truck from Ivanhoe's Semi Corp. by issuing a 6-month, 6% note payable...
Sheffield Company purchased a truck from Ivanhoe's Semi Corp. by
issuing a 6-month, 6% note payable for $117000 on November 1. On
December 31, the accrued expense adjusting entry is
|
a |
No entry is required. |
|
b |
|
|
c |
|
|
d |
|
Homework Answers
Note payable = $117,000
Date of note issue = November 1
Time period upto December 31 = 2 months
Interest rate = 6%
Interest payable on December 31 = Note payable x Interest rate x Time period/ 12
= 117,000 x 6% x 2/12
= $1,170
The following journal entry will be made on December 31:
|
d |
|
Correct option is d.
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